Dongbu HiTek's driver chip emits light and controls brightness in light-emitting diodes (LED) used in smartphone screens and camera flashes, the company said. The chip will mainly be used in budget smartphones.

The Korean contract chip maker has been one of the biggest producers for Kinetic, supplying driver and convertor chips.

It is also one of the main suppliers for local and foreign fablesses in image sensors, power management chips and touch screen drivers. Rising phone makers in China and Taiwanese are its future targets, it said.

Dongbu is also investing in development of driver chips for active-matrix organic light-emitting diode (AMOLED) and other next-generation products. It plans to increase the revenue contribution of chips for smartphones and tablets to 40 percent from its current 20 percent.